What is a mortgage?

A mortgage is a type of loan with low interest rate used to purchase or maintain a house, land, or other types of real estate. The borrower pays the bank over time, typically in a series of regular payments that are divided into principal and interest.

How monthly mortgage payments are calculated?

You can use the following formula to calculate monthly mortgage payments. The Interest Rate is an annual interest rate, months is number of payments over the loan’s lifetime.

Monthly Payment = Principal×Interest Rate12×(1+Interest Rate12100)months(1+Interest Rate12100)months-1